NEC, Toshiba may outsource Direct RDRAM packaging

TOKYO  NEC Corp. and Toshiba Corp., two of the industry's first chip makers to ramp production of Direct Rambus DRAMs, each indicated this week that it may begin to outsource packaging operations for the chip.

Interviewed here this week by EBN, executives at both companies said it would be more cost effective to outsource the chip's micro-BGA package assembly than to make the investments required to assemble the devices in-house.

Neither company would identify which contractors are being considered for the task. Traditionally, DRAM vendors handle back-end test and assembly internally, due to the cost structure associated with the commodity memory's extremely high production volumes. The added complexity and cost of the micro-BGA packages, however, has caused NEC and Toshiba to reconsider their back-end operational structure.

Toshihide Fujii, general manager of semiconductor strategic planning at Toshiba, said the company already is using a Japanese contractor to assemble the Direct Rambus micro-BGA packages built for Sony Computer Entertainment's Playstation 2 game console. He added that Toshiba is outsourcing most of its DRAM module assembly as part of a previously announced supply-chain management contract with Kingston Technologies Co. (Fountain Valley, Calif.).

Keiichi Shimakura, associate senior vice president of NEC, said the company is looking into outsourcing micro-BGA package assembly, but will continue to do its own testing of all Direct RDRAM devices. Even though Direct Rambus requires expensive new testers costing several million dollars each, "we want to retain control over this critical part of the back-end process," he said.

Shimakura added that NEC currently is considering a large investment in new testers for Direct Rambus, depending on how fast the new memory chips ramp up in the market.

NEC declined to discuss its Direct RDRAM production levels, although Shimakura said the company has the capacity to make 1 million units a month. Fujii said Toshiba is producing 2 million Direct Rambus chips a month, mostly for the Sony console. He said Toshiba is expanding production to start selling Direct RDRAM into the PC and workstation markets, and has set a production target of up to 6 million units a month by the end of the year.

NEC, Toshiba may outsource Direct RDRAM packagingJack Robertson
TOKYO  NEC Corp. and Toshiba Corp., two of the industry's first chip makers to ramp production of Direct Rambus DRAMs, each indicated this week that it may begin to outsource packaging operations for the chip.

Interviewed here this week by EBN, executives at both companies said it would be more cost effective to outsource the chip's micro-BGA package assembly than to make the investments required to assemble the devices in-house.

Neither company would identify which contractors are being considered for the task. Traditionally, DRAM vendors handle back-end test and assembly internally, due to the cost structure associated with the commodity memory's extremely high production volumes. The added complexity and cost of the micro-BGA packages, however, has caused NEC and Toshiba to reconsider their back-end operational structure.

Toshihide Fujii, general manager of semiconductor strategic planning at Toshiba, said the company already is using a Japanese contractor to assemble the Direct Rambus micro-BGA packages built for Sony Computer Entertainment's Playstation 2 game console. He added that Toshiba is outsourcing most of its DRAM module assembly as part of a previously announced supply-chain management contract with Kingston Technologies Co. (Fountain Valley, Calif.).

Keiichi Shimakura, associate senior vice president of NEC, said the company is looking into outsourcing micro-BGA package assembly, but will continue to do its own testing of all Direct RDRAM devices. Even though Direct Rambus requires expensive new testers costing several million dollars each, "we want to retain control over this critical part of the back-end process," he said.

Shimakura added that NEC currently is considering a large investment in new testers for Direct Rambus, depending on how fast the new memory chips ramp up in the market.

NEC declined to discuss its Direct RDRAM production levels, although Shimakura said the company has the capacity to make 1 million units a month. Fujii said Toshiba is producing 2 million Direct Rambus chips a month, mostly for the Sony console. He said Toshiba is expanding production to start selling Direct RDRAM into the PC and workstation markets, and has set a production target of up to 6 million units a month by the end of the year.